For starters we cannot deal with our soverign debt issues until we recognize the need to obviate the massive credit contraction we are expericing.se in point, it is a fact that the top five percent of the people in the US with respect to income account for nearly 40 percent of all US consumer spending. Just imagine if the annual salary of the top one percent is above $700,000, this group includes individuals earning more than $500,000 and up yearly. Coupled with the recent news that no, zero jobs were created in August and the prior months numbers were revised to show lower job creation, it is no way possible for any of the suggestion proffered by the Congress or Obama can work to create jobs without addressing the massive gap in consumption between the rich and poor, in particular if demand (more specifically lack of demand) is why there is minimal job growth. Now there are some who say Obama saved the country from a depression with his stimulus, but in fact it resulted in 2 million jobs vacated from the system, since the money went to the folks who already had money and desired to save it, or it went to those from foreign countries who currently own our debt and subsequently spent that money abroad and not here to create jobs.
Obama’s effort, even if more stimulus is introduced, will not produce any jobs. Likewise, the Republicans, who say they do not desire excessive regulations and want lower taxes, will not create jobs either, if history is any indication of what such policies evince. One reason is because over the past twenty years, household debt grew by more than thirty percent. Namely because of the lack of regulations proposed by the GOP for large corporations and Wall Street especially. Second, growing the economy, by reducing taxes for the top 2 percent while sales and payroll taxes for the masses continue to increase, will mean less money in the pocket of the average American, thus keeping consumer demand as it is or lowering it. Math shows us that US workers fortunate to be employed have increased in productivity, yet compensation and hourly wages have stagnated, not matching this productivity. Why, because just as prior to the great depression as it stands now, the majority of the wealth was in the hands of the top five percent. As Robert Reich notes in his book “Aftershock: the next economy and America’s Future” the top earners in the share of the nation’s total income reached their highest levels in 1928 and 2007 – both two years before major economic depressions. And Yes Virginia, a double dip recession as a kind way to say a depression.
Both Obama and the congress need to accept these facts. Obama needs to recognize big corporations are no longer singularly loyal to the US – they are global and have global interest. Republicans need to understand that deregulation places short-term profit gains over long-term economic. But I doubt if they will, seeing that House Majority Leader Eric Cantor wants to stop rules that regulate deadly mercury emissions and toxic coal ash from power plants suggesting that such regulations kill jobs (he fails to speak of the public health risk and loss of human life). I published a list four years ago that would grow the economy and create jobs, but what do I know, I just study history and do math.
I just wonder why places like India, China and Germany can do what we can’t – grow the economy and create jobs and increase earnings. German economic growth has outpaced the US for the past 15 years. Over the same period they have increased annual pay close to 30 percent while ours has increased almost 6 percent over the past fifteen years. The top 1 percent only takes 11 percent of the nation’s total income. Oh that’s right, they value education more, just as the other countries, and consistently out pace us in math and science aptitude, just as 26 other nations around the world.
Yes Obama has the second worse record to job creation of all US presidents, ranking only above Herbert Hoover. Yes, our attention deficit disorder having republican dominated congress seems to display the inability to comprehend that cutting taxes is not correlated to a decrease in the ratio of revenue to GDP. Not to forget a Treasury secretary who said the US credit rating would never be lowered, we have incompetence all around the nation’s capital.
Our economy suffers because in 2008 the chickens came home to roost – with no regulations, Wall Street, Banks and multi-national corporations were allowed to deal complex papers with unknown values like mortgage backed securities, which gave banks extra capital to enrich themselves by selling the same debt based securities of unknown value around the world. Simply because oligarch, people with great economic power and influence on politicians, republican and democrat equally, make the rules defining American economic policy to benefit themselves and ignore 95 percent of the nation. It not happen stance that The poorest 50% of all Americans now control just 2.5% of all the wealth in this country, or that the wealthiest 1% of all Americans now own over 50% of all the stocks and bonds.